Sections 1: Labor Market Trends And Section 2: Labor and Wages

Chapter 9: Labor

Sections 1: Labor Market TrendsAnd Section 2: Labor and Wages .

Labor Force – all NON-MILITARY people who are employed or unemployed

Employed People◦ Worked at least one hour for pay in the past

week◦ Worked 15 hours or more without pay in a

family business◦ Held jobs but didn’t work

Illness Vacation Labor disputes Bad weather

Defining the Labor Force

International Competition◦ Outsourcing

Contracting with another company To do a specific job Using the other company’s workers instead of their

own workers◦ Offshoring

Moving the entire company or parts of the company to another country

Hire their people for less money

Labor Force

Labor and Education◦ College and Post-high school training

It DOES matter Learning Effect

You learn specific skills that employers look for Screening Effect

You show that you can finish what you start

Labor Force

Derived Demand◦ Labor is DERIVED from the need to create a

different good or service Productivity of Labor

◦ The Quantity of a product made by one laborer

Labor and Wages

Workers SUPPLY labor Employers DEMAND labor Equilibrium Wage

◦ Workers are happy with the pay◦ Employers are happy with the pay

Supply and Demand for Labor

of labor

for labor

Unskilled Labor◦ No specialized skills◦ HUGE supply of capable workers◦ Low hourly wages

Semi-skilled Labor◦ Minimal specialized skills◦ Large supply of workers◦ Middle hourly wages

Wages and Skill Levels

Skilled Labor◦ Requires special skills and training◦ Often make hourly wages◦ Wages may be very high

Professional Labor◦ Requires advanced skills and education◦ White collar workers◦ Make a salary

Wages and Skill Levels

Labor Union◦ Organization of workers that tries to improve

Wages Benefits Working conditions

◦ Methods of reaching a labor agreement Union Actions

Strikes Labor slowdown

Outside help Mediation Arbitration

Unions and Labor